Independent owners have a head start in the game of introducing boutique hotels in Dubai, but brand executives said they are still very much in the game.
DUBAI, United Arab Emirates—In the run-up to its Expo 2020, Dubai’s enthusiasm for hotel variety is encouraging the growth of boutique independent and branded properties, according to sources.
Speaking at a panel titled “Stripping away the segments” at the recent Arabian Hotel Investment Conference, panelists said this bodes well for the new customer happy with staying across the segments from one trip to another.
Independent hotels, though, might have a head start compared to established chains in getting boutique and lifestyle assets to market as new markets come to terms with fresh accommodations concepts, said moderator Catalin Cighi, managing partner of Cain Hospitality Innovation.
But brands feel they have what it takes to secure share of wallet. The major hurdle is convincing owners, sources said.
“It is a new phase allowing memorable experiences and personalization. We can engage the market with a new DNA,” said Olivier Granet, managing director and COO of the Middle East at AccorHotels. AccorHotels’ brand Mama Shelter announced its first property in the region in late April, a 217-room asset in Dubai.
Pascal Gauvin, COO of India, the Middle East and Africa at InterContinental Hotels Group, said adaptability is key.
“We need to maneuver across the contradictory guest,” Gauvin said.
Granet agreed that the new boutique hotel in the Middle East will appeal to all guests, regardless of their usual choice of segment.
“We’re moving from traditional hotels as the same guest has different travel needs,” he said. “We’ve seen the same guests at both the Burj (Al Arab) and the Ibis.”
Gauvin said the mindset of the customer has moved away from the segment to the purpose of their stay.
“We understood that pretty quickly,” Gauvin said.
Shafi Syed, group chief development officer of Jumeirah Group, said the thinking behind adding lifestyle hotels needs to have more of an entrepreneur bent.
“We need to deliver lifestyle, not just build it,” Syed said.
Gauvin said new thinking has to be channeled into the challenging task of influencing the dream phase of customers’ booking journeys. The correct experiences and employees are critical to this, he added.
Not all the panelists were convinced the larger chains could successfully integrate boutique and lifestyle hotels into maturing markets dominated by traditional assets.
“I am anxious to see how a large company can deliver this. There is more freedom among small corporations,” said Kees Hartzuiker, CEO of asset management and advisory firm Ròya International, which has opened both independent and branded assets.
Hartzuiker said the cost of and strategy behind acquiring and retaining guests into a new format added additional pressures.
“The cost of the brand is against room revenue,” Hartzuiker said.
The battle to make guests loyal will be fought in the distribution arena, panelists said, which is a landscape where the nimbler independents might struggle.
“You cannot buy loyalty, especially in a new market. You have to earn it, and it is easier to retain customers than get new ones,” Syed said.
Gauvin said all channels need to be used sensibly in order to have the brands’ get an advantage over the independents.
“The power of the brand, the system, the people,” he said. “This is where we can win and leave opportunities for owners to tell us if we working at the right level. Hoteliers always work at the front line.”
Granet agreed, adding that partnerships with local entrepreneurs will ensure no one destroys the spirit that made particular boutique properties special and will preserve what guests like about the idea of local, boutique hotels.
“To make sure we are not killing the concept, while having all of AccorHotels support us,” Granet said.
Getting those guests into the hotel is just the first step, Hartzuiker said.
“Do not hide behind the data,” he said. “Brands can miss a trick on-site. Few brands do face-to-face reviews well and generally receive just bog-standard answers.”
But Granet noted some things need to change for brands to succeed in the space.
“We need to get back to our roots—that is, people—and so our management style needs to evolve,” Granet said.